Why grads’ pay still the same 2 decades later
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THE starting salary of university graduates has not risen much from 20 years ago, even with the rate of inflation, as productivity and readiness for the job market remain low, said Malaysian employers.
Ter Leong Yap, who first joined the workforce some 30 years ago, said his first paycheque was for about RM2,000, inclusive of allowances and benefits.
Ter, president of the Associated Chinese Chambers of Commerce and Industry of Malaysia, said today, a junior college graduate also earns only about RM2,000 a month.
“I think this is due to the supply-and-demand situation, the educational institution and the value chain. Graduates these days are not matching up to the market and employers cannot meet their requested pay either,” he told The Malaysian Insight.
“Even if hired, they can’t start work straight away, they need to be provided with additional training.”
Ter said the development of human capital is of paramount importance for the industry and companies in the long term.
“My own company provides additional training to employees, because this will elevate the company in the long term,” he said.
SME Association of Malaysia president Kang Hua Keong said today’s wages are actually lower compared with 20 or 30 years ago, after inflation is taken into account. The problem, he said, lies with Malaysia’s education system and the quality of its university education.
“I have discussed this with a vice-chancellor of a university before and he told me that universities are not training students for the workplace and companies and employers should provide additional training,” said Kang.
“If they performed well during the probation period, then the company will certainly give them a raise.”
Game of luck
Malaysian Employers’ Federation executive director Shamsuddin Bardan said the starting pay of RM2,000 is “the market rate” but it doesn’t mean many fresh graduates have gotten big pay hikes in short periods of time once they prove their productivity.
Hiring fresh graduates is a game of luck for employers, in which if you get lucky and hired a good worker, you’ll see an increase in productivity, he said.
On the other hand, he said, a bad hire means providing additional training for six months to a year.
Shamsuddin said because of the economic slowdown, many employers are reducing hiring and university graduates should treasure every job opportunity.
“Because of increased costs, many employers have frozen hiring. For example, vacancies for administrative positions in the market are only at 4% to 5%, it’s really difficult to get a job right now. If a company is hiring, then graduates must take advantage of it.”
Ter said raising the minimum wage is not the solution to low starting salaries, rather, the entire education system needs a “drastic overhaul”.
“If we want graduates to be treated better, then the Malaysian economy and education system need a drastic overhaul. Education should be in line with market demands, then only can graduates be employed. And this can only be achieved through various government policies.”
Special committee on workplace training
Ter suggested that educational institutions meet with industry players and form a special committee on workplace training.
“We all can sit down and form a blueprint but this blueprint cannot be used for the next eight to 10 years and will be reviewed according to market demands.
“For example, the coming of 5G technology means what is new today will be obsolete in two years, so the blueprint has to be constantly reviewed.”
SME Association’s Kang suggested that the education system be reformed, with a greater focus on forming good attitude among students, improving their command of languages, such as Malay, English and Mandarin.
“During semester breaks, students should go to different companies for internships to understand market’s technical and knowledge demands. Don’t fret about the wages, because employers will definitely give raises if you perform well.” – June 12, 2019.